Are Hong Kong tax incentives for family offices ‘too little, too late’? Some lawmakers think so

Name: Family offices explained video
Uploaded: 2022-04-04T11:00:24.000Z
Duration: 2 min 5 s
Description: Family offices explained video

It maybe too late as Singapore has offered tax waivers since 2020, lawmaker for accountancy constituency says

Financial services, liquid capital market connected to China make Hong Kong ‘natural choice’ for family offices: undersecretary for financial services and the treasury

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A view of Kowloon from Sky 100 at International Commerce Centre. Hong Kong private banks and other wealth management firms invested about US$255 billion worth of family offices’ assets in 2020, according to the Securities and Futures Commission. Photo: Sam Tsang

Enoch Yiu

Published: 7:00pm, 4 Apr 2022

The Hong Kong legislature will discuss a bill offering tax incentives to family offices in the second half of this year as it plays catch-up with regional hub Singapore, a plan that some lawmakers said might be a case of “too little, too late”.

Lawmakers will debate the law change under a new administration and a new chief executive after Carrie Lam Cheng Yuet-ngor, Hong Kong’s current leader, said on Monday that she would not seek re-election and step down on June 30.

“The proposed tax incentives would help Hong Kong to expand its wealth management industry by attracting more wealthy families to invest here. However, it maybe too late as Singapore has offered tax waivers since 2020, while Hong Kong has only started to discuss such incentives,” said Edmund Wong Chun-sek, a practising director at Patrick Wong CPA who also represents Hong Kong’s accountancy constituency in the city’s legislature.

Several lawmakers voiced similar concerns after they were briefed about the proposal by Undersecretary for Financial Services and the Treasury Joseph Chan Ho-lim during the monthly Financial Affairs Panel on Monday.

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Family offices explained video

Family offices are set up by wealthy families to invest their fortunes and manage their succession planning. Hong Kong private banks and other wealth management firms invested about HK$2 trillion (US$255 billion) worth of family offices’ assets in 2020, an increase of 46 per cent over the previous year, according to a survey by the city’s Securities and Futures Commission cited by Chan during the discussion.

“With our comprehensive financial services platform, as well as a liquid capital market that is uniquely connected to mainland China, Hong Kong is the natural choice for ultra-high-net-worth individuals to manage their portfolios in the region,” Chan told the panel. “The multiplier effect of family offices could be tremendous in bringing businesses to financial and related professional services, as well as channelling capital to our IPO [initial public offering] market, venture capital and private philanthropy.”